Streams, rivers, and freshwater marshes often depend on plant litter as a source of carbon, nutrients, and energy that drive ecosystem processes. Decomposition of this organic matter, such as leaves, wood, or emergent macrophytes, is mediated mostly by fungi, whereas the role of bacteria is minor. Fungal colonization leads to enzymatic breakdown of major plant polymers and fungal biomass accrual (often around 10% of total detrital dry mass), which makes decaying plant material more palatable to detritivorous invertebrates. Representatives of almost all major groups of fungi can be isolated from decaying plant litter collected in freshwater ecosystems or detected using molecular techniques; however, ascomycetes, including their asexual stages (e.g., aquatic hyphomycetes in streams), predominate. In recent years, utilization of radioisotopic approaches (e.g., acetate incorporation into ergosterol) to estimate fungal growth rates and production has facilitated the construction of partial carbon budgets for decaying plant litter that illustrate the importance of fungal decomposers in both lotic and lentic systems. For example, some estimates suggest that 23–60% of leaf litter carbon loss in streams can be explained by fungal assimilation (production plus respiration), which does not include fungal-mediated losses as fine particulate or dissolved organic carbon. Estimates of fungal contribution to plant carbon loss can be even higher (47–65%) in standing-dead emergent macrophyte systems in wetlands. The effects of environmental variables on fungal activity and plant litter decomposition in freshwaters, including inorganic nutrient availability and eutrophication, have also received considerable attention in the recent years. Molecular approaches are now becoming increasingly important in both streams and wetlands to assess the effects of environmental variables on litter-associated fungal assemblages. However, there are considerable differences in fungal dynamics and assemblages between streams and freshwater wetlands, which are discussed here in detail.